(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

Following on from the reception given to the Council of Governors of the ECB the day before, the CAC retained its momentum, emerging from the top of a diamond figure, gaining, on gap, 0.96% to 7,378 points .

As a reminder, if the powerful Frankfurt Monetary Institution increased the rent of the Euro by a quarter of a basis point, it suggested that this turn of the screw would probably be the last, before entering a plateau phase. A source of relief in the trading rooms, which can now be based on the idea of ​​finally reaching a terminal rate, in the absence of a pivot scenario.

The ECB had to adjust its inflation projections upwards and its economic forecasts downwards. The institution headed by C Lagarde also raised its inflation forecasts for 2023 to 5.6% then to 3.2% in 2024. Before hoping for a drop to 2.1% in 2025, getting closer to the The ECB’s medium-term objective set at 2%.

Konstantin VEIT, portfolio manager at PIMCO, believes “that the risks remain oriented towards further reductions in key rates compared to market expectations [et] that for inflation to fully normalize and return to the 2% target, a further slowdown in the economy and some weakness in the labor market are likely necessary.” The manager envisages “that the ECB will aim for a further reduction rapid PEPP reinvestments, potentially as early as this year.”

In terms of statistics, targets were largely exceeded on the Empire State index (NY Fed manufacturing index) and on the monthly report on American industry. On the other hand, the consumer confidence index (U-Mich, preliminary data) sank to 67.7.

On the stock side, Stellantis hardly suffered on the stock market from the start of the strike in the United States and gained 1.7% in Paris. Luxury remained well oriented, like its main representatives, Kering (+1.76%) or LVMH (+2.50%), with the support of retail sales above expectations in China.

On the other side of the Atlantic, the main equity indices ended Friday’s session in the red, like the Dow Jones (-0.83% to 34,618 points) but especially the Nasdaq Composite (- 1.56% to 13,708 points), as the outcome of the Fed FOMC approaches, and against a backdrop of warming in the American 10-year bond. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, depreciated by 1.22% to 4,450 points.

An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0670. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $90.80.

On the agenda this Monday, to follow at 4 p.m. the NAHB index of the American residential market.

Note the closure of Tokyo this Monday due to a public holiday.

KEY GRAPHIC ELEMENTS

On gap, the flagship tricolor index came out from above on Friday from a vast flattened diamond figure. One downside however, the close very far from its session high points. The challenge for this start of the week will be confirmation, possibly by pullback, or invalidation, by reintegration of the figure. In any case at this stage, there is no sectoral federation to support a CAC 40 direction.

FORECAST

Considering the key graphical factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is below resistance at 7436.00 points.

News Bulletin 247 advice

CAC 40
Negative
Resistance(s):
7436.00 / 7500.00 / 7585.00
Support(s):
7084.00 / 7015.00 / 6885.00

Hourly graph

Graph created from the software Prorealtime

Daily Data Chart

CAC 40: The thorny question of the sectoral federation (©ProRealTime.com)
Graph created from the software Prorealtime

function creatOutbrainJs() {
const creatJs = document.createElement(“script”);
creatJs.defer = true;
creatJs.src = “https://widgets.outbrain.com/outbrain.js”;
return document.body.appendChild(creatJs);
}

window.didomiOnReady = window.didomiOnReady || [];

window.didomiOnReady.push(function(Didomi) {
console.log(“Didomi ready “);

Didomi.getObservableOnUserConsentStatusForVendor(164)
.filter(function (status) { return status !== undefined })
.subscribe(function(consentStatus) {
if (consentStatus === false || consentStatus === true) {
console.log(“Didomi consent -> exécution du script outbrain “, consentStatus);
creatOutbrainJs()
}
});

});